Why it isn’t called “The Down Ballot Victory Fund”

I wrote before about an article in Politico describing the Hillary Victory Fund, and its operation in Minnesota, too. I was trying to find out about the HVF before the Politico article, but it piqued my interest even more.

The gloss put on the HVF by the Clinton campaign and the Democratic National Committee is that it provided a way for some of Hillary Clinton’s big money donors to contribute to the Clinton campaign, the DNC, and to state party units to help with all those down ballot races.

The HVF is the cornerstone of the Clinton campaign’s argument that Hillary is a good Democrat, and that Bernie is a bad one. But it’s a Potemkin Village. Up through the most recent reporting period, no money has been made available to the state DFL for local races, and very little elsewhere, even though the HVF program was created last summer.

It’s not that the DFL never received any money from the HVF; through March, it has received $214,000, but it paid out exactly that amount, on the days in which money was received, to the DNC. According to the Politico story:

For example, the Minnesota Democratic-Farmer-Labor Party received $43,500 from the victory fund on Nov. 2, only to transfer the same amount to the DNC that same day. The pattern repeated itself after the Minnesota party received transfers from the victory fund of $20,600 on Dec. 1 (the party sent the same amount to the DNC the next day) and $150,000 on Jan. 4 (it transferred the same amount to the DNC that day).

That means that Minnesota’s net gain from its participation in the victory fund was precisely $0 through the end of March. Meanwhile, the DNC pocketed an extra $214,100 in cash routed through Minnesota — much of which the DNC wouldn’t have been able to accept directly, since it came from donors who had mostly had already maxed out to the national party committee.

In other words, $214,000 made touch-and-go landings in Minnesota and then flew on to the DNC. Why would it do this?

An individual donor is limited to $2,700 donation to a candidate per election. That same individual is limited to a donation of $33,400 per year to the DNC. But the Hillary Victory Fund is not limited in amounts given to state party units, like the DFL, neither are — and here’s the good part — the state party units limited in contributions to the Democratic National Convention.

It seems that Hillary’s big donors aren’t all that interested in the down ballot races after all — which was a silly proposition in the first place. Word is, though, that the DNC is planning a multi, multi-million dollar negative teevee ad campaign against the Donald prior to the RNC. It’ll need a lot of money.

The whole thing is so transparent. On multiple occasions, large sums of money were deposited with the DFL, and managed to make it back out of town on the same day. How did that happen?

It almost certainly happened because, in the words of the Politico article:

But what happens to the cash after that initial distribution is left almost entirely to the discretion of the Clinton campaign. Its chief operating officer, Beth Jones, is the treasurer of the victory fund. And FEC filings show that within a day of most transfers from the victory fund to the state parties, identical sums were transferred from the state party accounts to the DNC, which Sanders’ supporters have accused of functioning as an adjunct of the Clinton campaign.

Apparently, HVF’s Beth Jones controls the movement of the funds; with all this money moving with such precision, it could hardly be otherwise. We can be pretty sure (I hope) that Jones was not given access to the regular checking account at the DFL, or other state party units, either, which means that a special account was almost certainly set up to receive HVF monies, and send them out again.

I guess the HVF and the DNC wanted to get the money back out of Dodge before the locals spent some of it.

It would be difficult to conjure a more transparent end run of campaign finance law. No money was given, truly, to the DFL; it was the money of large individual contributors to the DNC, laundered through the HVF and the DFL.

If state campaign finance law was applicable to this program, it would almost certainly be circumvention, a violation of law:

An individual or association that attempts to circumvent this chapter by redirecting a contribution through, or making a contribution on behalf of, another individual or association is guilty of a gross misdemeanor and subject to a civil penalty imposed by the board of up to $3,000. Minn. Stat. sec. 10A.29 (2015).

2 U.S.C. sec. 441f, the federal law on the subject, reads differently:

No person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person.

There are many federal cases involving conduit contributions, as they are called, to candidates directly. The typical scenario is a contributor who gives another person money to contribute in the latter’s name to a candidate, to evade campaign limits or some other disability on contribution.

I don’t presently advance an opinion on the scope or applicability of sec. 441f to the Hillary Victory Fund. I hope somebody considered it; I am trying to find that out now.

Update: Legitimate questions about the Hillary Victory Fund would include:

Who approved participation in the scheme, on both the DNC and DFL ends?

Did the Hillary Victory Fund offer any assurance that the plan was legal?

Was there a separate DFL bank account for HVF funds, and who had access to it?

Thanks for your feedback. If we like what you have to say, it may appear in a future post of reader reactions.